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Legal reforms will not let ASIC off the hook

Vulnerable investors have lost their life savings after trusting now-banned advisers working for Commonwealth Bank of Australia offshoot Commonwealth Financial Planning. Some were pressed into accepting low compensation, fearing that to fight on would harm their health.

Others struggle through, up against the nation's biggest bank, and wondering whether the regulator focuses too much on ''enforceable undertakings'' and not enough on punishment or protecting the public.

As Fairfax Media investigations have revealed, the Australian Securities and Investments Commission has questions to answer about its handling of complaints from whistleblowers in the CFP case and whether the problem is industry wide.

The victims want justice, and politicians, angry at the ''quite annoying'' responses of ASIC officials, hope to pursue it through a Senate inquiry ordered this week. The inquiry will be welcomed by a public increasingly perplexed at the penalties meted out to white-collar offenders.

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Here is a welcome opportunity to expose the mishmash of regulatory overlaps between financial planning and banking; the funding of ASIC; and the processes by which evidence of potential criminal conduct is referred to police and prosecutors.

Senators John Williams (Nationals) and Doug Cameron (Labor) have pushed for the inquiry into ASIC's legal powers, accountability, collaboration with other regulators, complaints handling policies and dealings with whistleblowers.

Their concerns erupted in angry exchanges with ASIC deputy chairman Peter Kell in estimates committee hearings on June 4. ''If you see cases where people, no matter where they are in those positions, are forging signatures, changing investments for higher gains, for better commission for themselves, then I think that is a very serious case,'' Williams told Kell. ''There are $1.3 billion in superannuation funds in our nation; a lot of it is self-managed funds. This nation is going to rely on good, sound, clean advice for financial planning.

''You are the corporate watchdog and I expect you, if you see wrongdoings and criminal acts … to report them.''

ASIC claims its handling of the CFP cases ''has been a landmark achievement that has completely changed the way that firm conducts its operations''. CBA has compensated 1127 clients of planners who gave "inappropriate advice", paying out $49.4 million. The regulator also claims a new regime regulating financial planners from July 1 will improve compliance.

But there are doubts about the penalties imposed on seven CFP offenders and what action has been taken against management. One planner is appealing against his seven-year ban from practising, handed down by the Administration Appeals Tribunal. The tribunal said it was ''required to take into account the protection of the public, deterrence (and) maintenance of public confidence in the profession''. Tellingly, ASIC did not raise the issue of the planner's allegedly fraudulent signatures in that case and the tribunal noted there was ''no allegation that (he) engaged in dishonest conduct''.

ASIC struggles to regulate with its relatively meagre budget. It is unclear whether the regulator is equipped to investigate allegations of potentially criminal conduct. There must also be questions about its preference for culture change in organisations when criminal action could be pursued.

Likewise, the new Future of Financial Advice reforms will ban some commissions open to conflict of interest, require planners to put the client's interest first and have better training.

But the reform will not stop the problem of supposedly independent planners selling the products of their employers. Nor will the reforms end the ''sales is everything'' culture. The Senate inquiry will report by March, presenting a test of the new federal government's resolve to tackle white-collar offenders.

Step aside Ricky, Cory is here to help

It's sad former Australian skipper Ricky Ponting has announced his retirement from competitive cricket just as the national team needs all the help it can get before the two forthcoming Ashes series. But fear not. Controversial Liberal senator Cory Bernardi is on the job.

Never mind that he ''was one of those kids who couldn't play any sport … couldn't catch, couldn't kick, no hand-eye co-ordination, couldn't hit a ball properly … If I was forced to play cricket I would have retired after my first backyard cricket game because I could never hit the ball''. Bernardi is also the man who linked same-sex marriage to bestiality and believes multiculturalism has failed. And he opposed the government paying funeral expenses for asylum seekers.

But on Thursday at 1.05pm Bernardi was acting deputy president of the Senate when he asked for the third reading of the Australian Citizenship Amendment (Special Residence Requirements) Bill 2013. It allows the immigration minister to rush through citizenship for a person engaged ''in an activity that is of benefit to Australia or who is engaged in work of a specified kind which is of benefit to Australia and for which the person is required to regularly travel outside Australia but who does not meet the residence requirements for citizenship''.

The Senate unanimously passed the law, which is designed primarily to allow Pakistani-born asylum seeker and leg-spinner Awad Ahmed to be eligible to play for Australia in the Ashes.

Ahmed played first-class cricket in Pakistan after getting his masters degree in international relations and political science. While he regards himself as a ''good Muslim'', Ahmed received death threats from Islamic extremists for his links to groups seeking to bolster women's rights.

He sought asylum in Australia in 2010, played for Victoria this year and is now with the Australia A team in England awaiting call-up for the Ashes. If we don't have a Ponting, at least we might have the next Shane Warne.

And the man who oversaw passage of the Ahmed citizenship law? In 2001 Bernardi said there had been ''an increasing indulgence of people who are pursuing an ideology and a values system that is at complete odds with Western society and with Western culture … Islam itself is the problem, it's not Muslims''.